Subject To - Buy and Hold - Good Idea or Not?

2 Replies

Hi BP!,

Here's the scoop. My sister and brother and law want to move out of there current townhome here in Houston and move to the suburbs. They are currently listing there home for 350k but from what they are telling me it seems that they are having a hard time selling it. I randomly stumbled upon a podcast where Brandon and guest mentions subject to financing and it crossed my mind why not ask my sister and brother if they were open to doing this.

I've browsed all the "subject to" posts and blogs on here and understand that I would be taking of their mortgage and they would have the title transferred to my name. A few questions I had are:

  • Why would anyone want to do a subject to as a seller as it is a risk?
  • What happens to the equity the seller has in the home currently? Do I pay them out? Do I not?
  • How does the Homestead Tax exemption work as the mortgage will still be in their name?
  • Does anyone have any experience with subject to buy and hold as an exit strategy? Will you please share your experience?

I'm only thinking about suggesting this to them as a possible solution for them if they cannot find a buyer. As it is my younger sister I want both sides to come out on top for this deal but since this would be my first investment I'm not entirely sure if this is the best route? Would greatly appreciate your thoughts and advice.


Business with family is always tricky, but I'll leave that up to you.

Sub-2 sellers almost always get around to wanting to buy again, and start making trouble with the lender. Be prepared to eventually paying off the loan - either through sell or refi.

If a property isn't selling, it is either price or condition.